SEC warns public against online lending companies

MANILA, Philippines - The Securities and Exchange Commission (SEC), the corporate regulator, is cracking down on lending companies that operate online especially on social media such as Facebook, Twitter, Linkedln and other websites.

The SEC warned the public to be careful of online lending companies.

“As a precautionary measure, the public is hereby advised to exercise prudence in dealing with online lenders by checking with the commission if they are registered and have a Certificate of Authority to operate as a lending company,” the SEC said.

It added that anyone who is desperately looking for money could be easily maneuvered by bogus or pseudo lending companies.

In its advisory, the SEC said the scheme of online lenders is to ask borrowers to provide their general and personal information and later on are asked to pay a processing fee.

The SEC has received complaints that after receiving the money, online lending companies would close all communication lines with borrowers and delete all negative comments against them.

“Some lending companies are even using fake or inexistent address in their profile to make the websites appear legitimate and valid,” the SEC said.

It has been cracking down on bogus lenders as part of the Duterte administration’s campaign against loan sharks who prey on helpless borrowers by slapping high interest rates on their loans.

As part of its crackdown, the SEC had filed cases against lenders that are not registered with the SEC or have used fake bank documents to make their businesses appear as legitimate.

The regulator also warned erring companies that engage in lending but are not registered with the SEC.

“They may be held administratively and criminally liable pursuant to The Lending Company Regulation Act of 2007 or Republic Act No. 9474, which provides, in part: a fine of not less than P10,000 and not more than P50,000 or imprisonment of not less than six months but not more than 10 years or both, at the discretion of the court,” the SEC said.